The Dilbert principle refers to a 1990s theory by Dilbert cartoonist Scott Adams stating that companies tend to systematically promote their least competent employees to management (generally middle management), to limit the amount of damage they are capable of doing.
I wrote The Dilbert Principle around the concept that in many cases the least competent, least smart people are promoted, simply because they’re the ones you don't want doing actual work. You want them ordering the doughnuts and yelling at people for not doing their assignments—you know, the easy work. Your heart surgeons and your computer programmers—your smart people—aren’t in management. That principle was literally happening everywhere.
Adams explained the principle in a 1995 Wall Street Journal article. Adams then expanded his study of the Dilbert principle in a 1996 book of the same name, which is required or recommended reading at some management and business programs. In the book, Adams writes that, in terms of effectiveness, use of the Dilbert principle is akin to a band of gorillas choosing an alpha-squirrel to lead them. The book has sold more than a million copies and was on the New York Times bestseller list for 43 weeks.
Adams' presentation of the principle is satirical—facetious but also addressing a real-world concern.
The Dilbert principle is comparable to the Peter principle. As opposed to the Dilbert principle, the Peter principle assumes that people are promoted because they are competent, and that the tasks higher up in the hierarchy require skills or talents they do not possess. It concludes that due to this, a competent employee will eventually be promoted to, and then remain at, a position at which he or she is incompetent. In his book, The Peter Principle, Laurence J. Peter explains "percussive sublimation", the act of kicking a person upstairs (i.e., promoting him to management) to get him out of the way of productive employees.
The Dilbert principle, by contrast, assumes that hierarchy just serves as a means for removing the incompetent to "higher" positions where they will be unable to cause damage to the workflow, assuming that the upper echelons of an organization have little relevance to its actual production, and that the majority of real, productive work in a company is done by people lower in the power ladder. Unlike the Peter principle, the promoted individuals were not particularly good at any job they previously held, so placing them in a supervisory position is a way to quietly remove them from the workforce without actually firing them, rather than a reward for meritorious service. An earlier formulation of this effect was known as Putt's Law.
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